Paper Title
An Assessment Of The Effect Of Mergers And Acquisitions On Firms’ Performance

Abstract
Mergers and acquisitions (M&As) plays an important role in corporate finance by enabling firms achieve their various objectives and financial strategies. This study aims at establishing the impact of mergers and acquisitions on firms’ performance in terms of profitability ratio of US firms listed on the NYSE or NASDAQ. This study will be guided by the objective of finding the effects of changes in profitability, liquidity and leverage on firms’ financial performance. A random sample of 30 merged/acquired firms in the US during the period of 2010-2014 was considered. A set of 4 ratios (ROA, PM, DE, EPS, QR) together with log of total assets was used to analyzed the performance of companies before and after the M&A deals were made. The analysis was done using Ordinary least squares (OLS) regression method. The regression results show that mergers have a significant negative impact on profitability. Moreover, the study also reveals that liquidity, assets growth and shareholders’ value have positive effects on profitability whereas leverage has negative effects on profitability. This research will contribute to the existing literature because there are relatively fewer studies done to establish the link between mergers and profitability as compared to studies which use event study methodology. Keywords - Mergers, Acquisitions, Financial Performance, Acquired Firms